Little Relief From Big Government

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Should the Anschutz Entertainment Group get a bit of relief from the state’s environmental law to build a football stadium in downtown Los Angeles?

That question has been bandied about lately on local radio, at coffee shops and in newspapers because the Legislature passed a proposal to do just that. (At press time, the bill awaited the governor’s signature or veto.) And it’s a provocative question.

For the record, let’s dispense with my own opinion: No, AEG shouldn’t get special treatment. AEG’s stadium proposal appears to be a good and generous one, but that doesn’t merit any fast-tracking of the state’s environmental legal process. The law’s the law, and even though I sympathize with businesses that complain how onerous the law is, it should apply equally to all.

What’s interesting to me is that many of those who have engaged in the little civic debate over the question seemed to be indignant. Their main point: It’s unfair that a powerful, wealthy and well-connected developer like AEG can run to Sacramento and get a little break. That’s an abuse of power, they say. And the break that Ed Roski Jr. got earlier was a greater abuse of wealth and power. (AEG persuaded elected types to fast-track the often years-long legal process to resolve any challenges under the California Environmental Quality Act. Roski, who is proposing a competing football stadium in the City of Industry, got a better deal: a broader exemption from CEQA.)

I’m making generalizations here, but it seems to me that many of the same folks who are so indignant about these alleged abuses seem to be the same folks who love big government. Big government “solutions.” Big laws like CEQA. Big bureaucracies. And these folks seem clueless that big governments are the ones that force big companies to pay fealty to them. And they like it that way – the big government people (including the politically connected pressure groups) that get bought out as well as the big companies that can afford to buy some special break.

I mean, what are these people indignant about? To have big businesses lobbying and currying big government is the direct result of the big government system they love. I dare say, it’s the desired result.

Look at the federal tax code. It’s not the medium-size or small companies but the big companies that buy their way out of taxes by lobbying Washington to give them breaks. It’s a cozy relationship that Washington loves as much as big companies. (Did someone say “General Electric”?)

Warren Buffett actually seemed indignant that he has a lower tax rate than his secretary. But why so? He’s the one able to buy favors and special tax exceptions from Washington. Not his secretary. That’s the direct and obvious and inevitable result of a big, complicated tax code created by big government. The big government he loves and benefits from.

There’s a simple solution. Washington could create a new tax code. A few clear, simple tax rates. A few – and I mean few – deductions and exemptions. No loopholes. Make sure the whole thing fits on a half-page. Washington could do that before lunch. (But I don’t think Buffett would be pleased with his new tax bill.)

Much the same is true with CEQA. It is a big and complicated law that has created a perverse system in which smaller developers get ground down by the long, expensive process but big ones can lobby their way out. And the political folks and the pressure groups that benefit from it love it that way.

And for the record, while I don’t like the fact that AEG has positioned itself for special treatment, I’m not indignant about it. AEG simply played the game that Sacramento imposed on it.

And let’s be clear. There is a simple solution to CEQA. Sacramento could fix it before lunch.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].

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